The decline of the USD/JPY currency exchange rate has continued, as by the middle of Tuesday's GMT trading hours the rate had touched the 107.80 mark.
In regards to the near term future, it appeared on Tuesday that the rate could consolidate and afterwards resume the decline.
Economic Calendar
During the week, the action on the economic calendars will start and most likely end on Wednesday. At 18:00 GMT the US Federal Reserve is scheduled to make a rate announcement and FOMC Statement.
Prior to that, a minor reaction could be caused by the US CPI at 12:30 GMT.
In addition, economic calendars show the US PPI and Unemployment Claims on Thursday. The last PPI release caused a move below normal volatility.
USD/JPY short-term daily review
On Monday, the USD/JPY currency pair dropped to the 108.40 level. During today's morning, the pair declined below the weekly S1 at 108.04.
Given that the exchange rate is pressured by the 200-hour SMA and the Fibo 50.00% at 108.35, it is likely that some downside potential could prevail in the market. In this case the rate could gain support from the monthly PP at 107.33.
Meanwhile, it is unlikely that bulls could prevail in the market, and the currency pair could exceed the resistance cluster formed by the weekly PP, the monthly R1, as well the 55– and 100-hour SMAs in the 108.66/109.00 area.
On the daily candle chart, it was previously noted that the rate is overbought, as it had moved too far away from the simple daily moving averages. On Monday and on Tuesday, the rate had returned to the SMAs.
Namely, on Monday, the 100 and 200-day SMAs were reached on Monday. On Tuesday, they were passed and the 55-day SMA was reached.
Daily chart
Given that the exchange rate is pressured by the 200-hour SMA and the Fibo 50.00% at 108.35, it is likely that some downside potential could prevail in the market. In this case the rate could gain support from the monthly PP at 107.33.
Meanwhile, it is unlikely that bulls could prevail in the market, and the currency pair could exceed the resistance cluster formed by the weekly PP, the monthly R1, as well the 55– and 100-hour SMAs in the 108.66/109.00 area.
Hourly Chart
On the daily candle chart, it was previously noted that the rate is overbought, as it had moved too far away from the simple daily moving averages. On Monday and on Tuesday, the rate had returned to the SMAs.
Namely, on Monday, the 100 and 200-day SMAs were reached on Monday. On Tuesday, they were passed and the 55-day SMA was reached.
Daily chart
Read More: Technical Analysis
Traders short the pair
On Tuesday, on the Swiss Foreign Exchange 61% of open position volume was in short position.
Meanwhile, 59% of set up pending trade orders in a 100 pip range around the exchange rate were set to buy.
Previously, 59% of orders were to buy. The orders had not changed since Monday.